Business without borders
Affinity Express recently landed the advertising design account for all 95 Chicago area publications of the Sun Times Media Group, which includes the Chicago Sun-Times.
The Elgin-based graphics outsourcing firm is capitalizing on the cost savings from shipping, via the Web, all its graphics work to India and the Philippines.
So an ad seen in a Sun Times group newspaper such as The Courier News in Elgin may have been created in Pune, India, or Manila and shipped back to the newspaper.
This outsourcing business model is proving wildly successful as the company is growing sales by more than 50 percent per year, according to its newly appointed chief executive, Kenneth Swanson.
"We're the largest business process outsourcer exclusively dedicated to the graphics industry," said Swanson, who was hired earlier this year. "This is a very fast paced global company … We tell people, you don't need the infrastructure; We can do it all over the Web."
Swanson said the estimated 140 newspaper clients of Affinity Express can count on saving 20 percent to 40 percent of their advertising production costs.
That savings is significant, he said, as newspaper ad revenues fall and Internet use rises.
In addition to newspaper ads, Affinity Express' services include embroidery digitizing, promotional work, image editing and document creation both in print and online.
It also works with corporations and promotional companies.
The business processing outsourcing industry around the world is a multi-billion industry growing at about a 11 percent pace, according to statistics quoted by Russ Pass, co-founder of Bridge Strategy LLC. in Chicago.
He said he has seen studies indicating it generates $580 billion a year in sales.
"As time goes on, there will be a lot more outsourcing like this because it represents the specialization of the economy," said Pass, an outsourcing consultant. "Specialization is the march of history."
Affinity Express began in the 1980s as a family run embroidery firm, making patches for Girl Scouts and other organizations.
In 1993, as the textile industry increasingly moved off-shore, the Elgin company opened operations in India.
As it branched out into other kinds of graphics it incorporated in 2001 and took on venture capital.
In 2006, it was bought by Philippines conglomerate Ayala Corp., which has a combined market capitalization there of $20 billion.
Affinity Express currently employs 800 people working with more than 6,000 clients. Affinity Express declined to estimate its annual revenue.
While most of its sales come from the United States, most of its employees work abroad.
About 15 of its people work at its Elgin headquarters, about 100 people work in the United States, according to the firm.
However, in India it employs about 600 graphic artists and it intends to have a work force of about 250 graphic artists in Manila by the end of the year.
Swanson said his goal for the company is to become the top "provider of high volume, multimedia design solutions in the world."
"Businesses have to innovate and help their customers evolve into this global world market," Swanson said. "The boundaries between states and countries have been blurred."